German chipmaker Infineon to supply Tesla Model 3

FRANKFURT/MUNICH: Infineon will supply parts to Tesla’s upcoming mass-market Model 3 electric car, the German chipmaker said on Tuesday, after being beaten out as initial supplier by Franco-Italian rival STMicroelectronics for the coveted deal. Infineon, which supplies chips to control the batteries and motors in eight out of 10 of the world’s top selling electric vehicles, confirmed its parts would go into the Model 3, which is now ramping up for volume production in 2018.
“We do not comment on the individual models, but we will also will be present in Model 3,” Chief Executive Reinhard Ploss told reporters after Infineon reported third-quarter operating profit just ahead of analysts’ consensus forecast. The German company’s products are already in Tesla’s Model S sports car, the world’s top-selling electric vehicle, but the Model 3 — costing $35,000 in the United States — has the potential to significantly outsell the $60,000 Model S.
STMicroelectronics was first to market with a new class of highly energy efficient 1,200-volt silicon-carbide chips, which brokerage Liberum said helped it win the initial deal to supply power chips for the Model 3. But it predicted Infineon would become a second source of such chips as volumes ramp next year. Last Friday, Tesla delivered the first 30 Model 3s to employee buyers, part of more than half a million advance reservations.
While its presence in the Model 3 could be a boost, Ploss said most of the demand for Infineon’s electric vehicle parts would continue to come from Asia. “Our success is very much dependent on Asia,” he said. — Reuters